Which aggregate supply curve has a positive slope?
A) long-run only
B) short-run only
C) both long-run and short-run
D) neither long-run nor short-run
When a negative externality exists, the private market produces
A) more than the economically efficient output level.
B) less than the economically efficient output level.
C) products at a low opportunity cost.
D) products at a high opportunity cost.
Households ________ final goods and services in the ________ market.
A) purchase; factor
B) purchase; product
C) sell; factor
D) sell; product
The Fed
A) can easily distinguish the minor ups and downs of the economy from a recession.
B) can have difficulty distinguishing the minor ups and downs of the economy from a
recession.
C) always times its policy responses correctly.
D) can easily determine if a drop in production means a recession is inevitable.
The benefit to the firm from hiring one additional worker is called the
A) marginal revenue product of labor.
B) marginal revenue.
C) marginal profit.
D) total revenue.
Economists John Cogan, Glenn Hubbard, and Daniel Kessler have estimated that
repealing the tax preference for employer-provided health insurance would
A) significantly reduce the effectiveness of the health care received by those enrolled in
these programs.
B) increase overall spending on health care as consumers would have to pay a higher
price for medical services.
C) drive up prices for health care coverage since insurance reimbursements to doctors
would be reduced.
D) reduce spending by people enrolled in these programs by 33 percent.
Disposable income is defined as
A) national income – transfers + taxes.
B) national income + transfers + taxes.
C) national income – transfers – taxes.
D) national income + transfers – taxes.
Macroeconomics is the study of
A) how households make choices.
B) how firms make choices.
C) how households and firms make choices.
D) the economy as a whole.
Producing a differentiated product occurs in which of the following industries?
A) oligopoly, monopolistic competition and perfect competition
B) monopolistic competition only
C) oligopoly only
D) monopolistic competition and oligopoly
Scenario 1-2
Suppose a hat manufacturer currently sells 2,000 hats per week and makes a profit of
$5,000 per week. The plant owner observes, “Although the last 300 hats we produced
and sold increased our revenue by $1,000 and our costs by $1,100, we are still making
an overall profit of $5,000 per week so I think we’re on the right track. We are
producing the optimal number of hats.”
Had the firm not produced and sold the last 300 hats, would its profit be higher or
lower, and if so by how much?
A) Its profit will be $1,100 higher.
B) Its profit will be $100 higher.
C) Its profit will be $100 lower.
D) Its profit will be $1,000 lower.
Which of the following assets is most liquid?
A) money
B) bond
C) savings account
D) stock